Kotak Mutual Fund launches Nifty 100 Low Volatility 30 Index Fund

Kotak Mutual Fund has announced the launch of the Kotak Nifty 100 Low Volatility 30 Index Fund, an open-ended scheme replicating or tracking the Nifty 100 Low Volatility 30 Index.

The new fund offer or NFO of the scheme will open for subscription on May 22 and close on May 31. The scheme will reopen for continuous sale and repurchase on or before June 12. It will be benchmarked against NIFTY 100 Low Volatility 30 Index (Total Return Index). The scheme will be managed by Devender Singhal and Satish Dondapati (equity investments), and Abhishek Bisen (debt investments).

The Nifty 100 Low Volatility 30 Index is a strategic investment index comprising stocks of large market capitalisation, selected from the Nifty 100 Index. Focus on low-volatility stocks within the Nifty 100 Index ensures an investment portfolio. The selection of securities and their weights are based on volatility for the last year. It offers a cost-effective and transparent approach to investing in the Indian stock market within the largecap space, according to a press release by the fund house.

The investment strategy would revolve around reducing the tracking error through rebalancing of the portfolio, taking into account the change in weights of stocks in the index as well as the incremental collections/redemptions from the Scheme.

“At Kotak Mutual Fund, we continually strive to provide our investors with diverse investment solutions. The launch of the Kotak Nifty 100 Low Volatility 30 Index Fund is aligned with our commitment to offer products that cater to different risk appetites and investment horizons. Currently, largecaps are at reasonable valuations as compared to midcaps and smallcaps. This fund offers investors an opportunity to invest in a rule-based index that invests in low volatile largecap companies across different sectors,” said Nilesh Shah, Managing Director of Kotak Mutual Fund.

The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by the underlying index, subject to tracking errors.“Investors looking to invest in large companies and wanting further lower volatility can now opt for Nifty 100 low volatility 30 index as an investment option. A bouquet of 30 largecap companies from the Nifty 100 index that constitutes this fund can help investors diversify their portfolios for long-term capital appreciation. We are excited to launch the Kotak Nifty 100 Low Volatility 30 Index Fund NFO,” said Devender Singhal, Executive Vice President and Fund Manager, Kotak Mutual Fund.The scheme will invest 95-100% in equity and equity-related securities covered by NIFTY 100 Low Volatility 30 Index, 0-5% in debt/money market instruments.

The scheme is suitable for investors who are seeking long-term capital growth and want returns that correspond to the performance of Nifty 100 Low Volatility 30 Index subject to tracking error. The principal invested in the scheme will be at “very high” risk according to the riskometer of the scheme.